Party City Announces Additional Actions in Response to COVID-19
April 08 2020 - 7:00AM
Party City Holdco Inc. (the “Company” or “PRTY”; NYSE:PRTY) today
announced additional measures it is taking in response to the
current business environment created by COVID-19.
As previously announced on March 27, 2020, the
Company extended the temporary closures of its stores until further
notice. The Company’s e-commerce site, www.partycity.com, remains
fully operational and the number of stores offering curbside pickup
continues to expand.
Today the Company announced the following
additional actions:
- A temporary base salary reduction of 50% for Brad Weston, Chief
Executive Officer, 30% for Todd Vogensen, Chief Financial Officer
and 15% to 20% for the remainder of the executive leadership
team
- The Board of Directors has elected to forgo their respective
quarterly cash retainers for the second quarter of 2020
- The furlough of approximately 90% of store employees and 70% of
wholesale, manufacturing and corporate employees. The Company will
continue to provide health benefits to furloughed employees
- Non-payroll expense reductions including advertising, occupancy
and other store operating expenses, as well as professional and
consulting fees
- Cancellation of orders and negotiated receipt delays to manage
inventory levels
- Significant reduction in 2020 capital expenditure budget
Brad Weston, CEO, stated, “As we continue to
navigate these unprecedented times, we made the difficult decision
to furlough a majority of our team members. We will continue to
provide these team members health benefits and have also
established the PCHI Employee Assistance fund for employees who are
temporarily experiencing economic hardship due to the coronavirus
pandemic. We believe our aggressive focus on expense, inventory and
capital expenditure reduction will help preserve our financial
health and flexibility as we work to ensure readiness to re-open
our stores and welcome back our team members and customers as soon
as the situation permits.”
Mr. Weston added, “In the meantime, with our fully
operational e-commerce site and expanding curbside pick-up, we are
here to meet customers’ needs, with relevant offerings like our
‘Adventure in a Box’ and ‘Birthday in a Box’ assortment, as adults
and children alike find new ways to adapt to the current
environment and creatively and safely celebrate at home.”
About Party City
Party City Holdco Inc. is the leading party goods
company by revenue in North America and, we believe, the largest
vertically integrated supplier of decorated party goods globally by
revenue. The Company is a popular one-stop shopping destination for
party supplies, balloons, and costumes. In addition to being a
great retail brand, the Company is a global, world-class
organization that combines state-of-the-art manufacturing and
sourcing operations, and sophisticated wholesale operations
complemented by a multi-channel retailing strategy and e-commerce
retail operations. The Company is the leading player in its
category, vertically integrated and unique in its breadth and
depth. Party City Holdco designs, manufactures, sources and
distributes party goods, including paper and plastic tableware,
metallic and latex balloons, Halloween and other costumes,
accessories, novelties, gifts and stationery throughout the world.
The Company’s retail operations include approximately 875 specialty
retail party supply stores (including franchise stores) throughout
North America operating under the names Party City and Halloween
City, and e-commerce websites, principally through the domain name
PartyCity.com.
Forward-Looking Statements
This press release contains forward-looking
statements that are subject to many risks and uncertainties.
Forward-looking statements give current expectations or forecasts
of future events or our future financial or operating performance
and include Party City’s expectations to preserve its financial
health and flexibility through its aggressive focus on expense,
inventory and capital expenditure reduction. The forward-looking
statements contained in this press release are based on
management's good-faith belief and reasonable judgment based on
current information, and these statements are qualified by
important risks and uncertainties, many of which are beyond our
control, that could cause our actual results to differ materially
from those forecasted or indicated by such forward-looking
statements. These risks and uncertainties include: our ability to
compete effectively in a competitive industry; fluctuations in
commodity prices; our ability to appropriately respond to changing
merchandise trends and consumer preferences; decreases in our
Halloween sales; the impact of helium shortages on our financial
performance; disruption to the transportation system or increases
in transportation costs; product recalls or product liability;
economic slowdown affecting consumer spending and general economic
conditions, including as a result of the COVID-19 pandemic; loss or
actions of third party vendors and loss of the right to use
licensed material; disruptions at our manufacturing facilities; and
the additional risks and uncertainties set forth in “Risk Factors”
in Party City’s Annual Report on Form 10-K for the year ended
December 31, 2019 and in subsequent reports filed with or furnished
to the Securities and Exchange Commission. Although we believe that
the expectations reflected in the forward-looking statements are
reasonable, we cannot guarantee future events, outlook, guidance,
results, actions, levels of activity, performance or achievements.
Readers are cautioned not to place undue reliance on these forward
looking statements. Except as may be required by any applicable
laws, Party City assumes no obligation to publicly update or revise
such forward-looking statements, which are made as of the date
hereof or the earlier date specified herein, whether as a result of
new information, future developments or otherwise.
Contacts
Investor Relations
ICR
Farah Soi and Rachel Schacter
203-682-8200
InvestorRelations@partycity.com
Media Relations
ICR
Brittany Fraser
203-682-8200
PartyCityPR@partycity.com
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